Washington State's compliance environment is defined by two features that distinguish it from most other states: the Business and Occupation (B&O) tax, which taxes gross receipts rather than income, and the Department of Revenue's (DOR) aggressive enforcement posture. Understanding both is essential for any entity doing business in Washington.
Annual Report Filing
Every Washington domestic LLC and corporation must file an Annual Report with the Secretary of State. The report is due in the anniversary month of the entity's formation. LLCs pay $60; corporations pay $60 (domestic) or $71 (foreign). The report is filed online at the Washington Corporations and Charities Filing System (CCFS). Late filing results in administrative dissolution after a 60-day cure period. Reinstatement fees are $25 plus all unpaid annual report fees.
Business and Occupation (B&O) Tax
The B&O tax under RCW Chapter 82.04 is Washington's primary business tax. Unlike a corporate income tax, it is assessed on the gross amount received from business activities — no deduction for cost of goods sold or operating expenses. This means a business with $10M in revenue and $9.9M in costs still pays B&O tax on the full $10M.
Tax rates vary by business classification:
- Retailing: 0.471%
- Wholesaling: 0.484%
- Manufacturing: 0.484%
- Service and Other Activities: 1.5%
- Professional Services: 1.5%
Businesses with annual gross receipts below $100,000 are exempt from B&O tax but may still need to register. Returns are filed monthly, quarterly, or annually depending on the tax liability amount, via the DOR's My DOR portal.
Retail Sales Tax Collection
Washington has no individual income tax but has a 6.5% state sales tax plus local jurisdiction taxes that can bring the combined rate to over 10% in some areas. Businesses making retail sales in Washington must collect and remit sales tax. Remote sellers with over $100,000 in Washington sales or 200 transactions must collect sales tax under the state's economic nexus rules (RCW 82.08.052), enacted following South Dakota v. Wayfair.
Employer Obligations
Washington does not have a state income tax, which simplifies payroll somewhat. However, Washington employers must pay into the state's industrial insurance (workers' compensation) fund administered by the Department of Labor and Industries under RCW Chapter 51.04. Rates vary by industry classification code. Employers must also register for Unemployment Insurance with the Employment Security Department and pay quarterly contributions.
Washington enacted a Long-Term Care Insurance program — WA Cares (RCW 50B.04) — requiring employers to withhold 0.58% of wages from all employees. The program went into effect July 1, 2023.
Paid Family and Medical Leave
Washington's Paid Family and Medical Leave program (RCW Chapter 50A.05) requires employers to collect and remit employee and employer premiums quarterly. The total premium rate for 2025 is 0.92% of wages. Employers with fewer than 50 Washington employees owe the employee portion only (no employer contribution).
Key Deadlines
- Annual Report: Anniversary month. Fee: $60. Reinstatement fee: $25 + arrears.
- B&O Tax Return: Monthly, quarterly, or annually depending on volume. Due last day of month following period end.
- WA Cares Premium: Quarterly, by end of month following quarter end.
- Paid Family and Medical Leave: Quarterly, same schedule as WA Cares.
How Compliance Singularity Handles Washington
Compliance Singularity tracks your Washington annual report anniversary date and files through the CCFS portal automatically. For the B&O tax, the system integrates with your accounting software to compute gross receipts by classification, selects the correct filing frequency, and queues returns for submission through My DOR. Washington's employer obligations — WA Cares, PFML — are detected from payroll data and built into the quarterly filing calendar.